Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Debate between Jim McMahon and Marcus Jones

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 5th September 2017 Commons Chamber

[Mr Jones]

I am sure that my right hon. Friend the Minister will be very happy to talk to my hon. Friend about this issue.

As I have said, through our work with the sector and the Valuation Office Agency, we believe that we have found a clear way to capture the concept of new fibre. We have set this out in our draft regulations and the consultation document that we published last week. However, this is a technical and fast-moving sector, so we will keep the operation of the relief under review to ensure that it is working as planned and that the regulations keep pace with the continuing technical advances and changes in the industry. Accordingly, it will remain important that we have the powers available to amend the operation of the relief scheme over time. The powers in the clauses will also allow the Secretary of State to determine the level of relief to be awarded. As I have said, the Government intend to allow telecoms operators 100% relief, but only for new fibre. That new fibre will of course form part of existing telecom networks with existing ratings assessments.

Through the operation of this scheme, we intend to ensure that the relief is awarded only in respect of new fibre and not existing fibre. To achieve this, the powers in the clauses will allow us to set, by a formula contained in regulations, the correct level of relief for each property, reflecting the amount of their network that qualifies for the relief. This will be based on a certificate of the amount of rateable value that it appears to the valuation officer is attributable to the new fibre. The consultation document we published last week explains how, when taken together, the formula in the Bill and the formula in the draft regulations will deliver the correct relief for a property.

As I have said, these provisions are mirrored in the first three clauses of the Bill. Sometimes the letters in the formula differ, but that is merely to conform to existing lettering in the sections into which the formula will be introduced. Hon. Members will have noticed that clause 1 includes a table referring to different subsections. In theory, there will be instances where a property could be eligible for the new fibre relief but also for another such as charitable relief, although we believe this to be extremely unlikely. However, for completeness, the table in clause 1 makes it clear which relief should apply. No such conflict can arise for unoccupied properties or properties on the central list, so the table appears only in clause 1. The rules we have adopted here are consistent with the existing hierarchy of reliefs in the business rates system. Charity relief will apply above all others, and then reliefs such as small business rate relief. The relief for new fibre will apply only where no other relief applies.

Clause 4 gives effect to the schedule to the Bill. As I have described, the Bill makes a number of amendments to different sections of the Local Government Finance Act 1988. Most of the amendments in the schedule are to that Act, and are necessary merely to ensure that those provisions continue to make sense and operate as intended. We are also in the schedule making consequential changes to the Business Rate Supplements Act 2009. Ratepayers entitled to mandatory reliefs in the main business rates system are also entitled to the same relief against the business rate supplement currently applied to larger properties in London. The Bill ensures that that continues to apply for the new fibre relief through these consequential amendments.

Clause 4 also includes the normal power to make regulations for other consequential provisions. We intend to use these powers to make consequential changes to the regulations that govern the transitional relief scheme. This will ensure that the relief is also available for those ratepayers who are either receiving transitional relief or whose reductions from the revaluation are being capped to fund the transitional relief.

Clause 5 provides the normal authority from Parliament that is necessary when making provisions that create a charge on public funds.

Clause 6 provides that the Bill applies to England and Wales. Business rates policy is devolved, so it will be for the Welsh Government to consider whether to introduce a similar relief. The Welsh Assembly Government have asked for the powers in this Bill to apply to Wales, although it will of course be a matter for Welsh Ministers to exercise those powers in relation to Wales. In Scotland and Northern Ireland, business rates legislation is made in their own Parliaments, so again it will be a matter for them whether to proceed with this measure. However, under the Barnett formula, Wales, Scotland and Northern Ireland will receive their share of the funding of the relief. As we have discussed, the relief for new fibre will apply from 1 April 2017, so clause 6 also provides that the amendments and powers in the Bill can take effect retrospectively for the financial year commencing 1 April 2017.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

We have just had a run-through of what the Bill contains, and by and large we welcome it. It is one of the remnants of the Local Government Finance Bill, which fell when the general election was called, and which contained things that industry and local government leaders wanted to see introduced. This could well be the first of several proposals, and I would welcome a conversation about that.